This is the first installment in a Q&A series with Laura Ann Sweitzer. (Link to the second & third installments at the end!) We did the Q&A over Instagram DM in July 2019 and shared the convo via screenshots. The convo is saved in my and the full transcript is below.
Laura Ann Sweitzer is the Director of TCHO Source, TCHO’s unique program for addressing challenges in the cocoa supply chain. Sweitzer also purchases all of the cocoa beans and cocoa products used by TCHO. In addition to working closely with TCHO’s suppliers, Sweitzer focuses on quality and flavor at every step in the sourcing and chocolate making process.
Prior to joining TCHO in 2014, she spent 5 years working on coffee quality improvement projects in Latin America, Africa, and Asia. Sweitzer grew up on a farm in the Midwest and is passionate about sustainability, equity, and flavor in food.
Umeko Motoyoshi: Hi Laura! Thank you so much for joining me today for this conversation!
Laura Ann Sweitzer: Thank you Umeko – happy to connect!
UM: I have so many questions for you but first I wanted to learn more about what you do at @tchochocolate as Director of TCHO Source. Can you tell me about your role?
LAS: Sure! While most cocoa contracts include only physical specifications for the corresponding cocoa beans, TCHO has focused on sourcing cocoa in a wide range of specific flavors. This was extremely hard when we first started- because none of TCHO’s suppliers were tasting their own cacao. So TCHO started TCHO source to install Flavor Labs (mini bean to bar chocolate factories) at all of our suppliers and collaborate with them to develop a shared standard/language for sensory analysis of cocoa. I lead all of TCHOs collaborations around flavor and also purchase all of the cocoa used in our chocolate!
UM: That is super interesting!
So I have a quick question on terms before we get into it – when is it correct to use the word ‘cacao’ and when should I say ‘cocoa’?
LAS: There isn’t consensus. Chocolate is made from the seeds of the Theobroma Cacao Tree. Use of “cacao” versus “cocoa” for the pods and chocolate products is inconsistent. I’ll stick to cocoa for our conversation today 🙂
UM: Ok I’ll do the same, thank you for that explanation! So you came from specialty coffee before cocoa, is that right?
LAS: Yes – I worked on grant funded coffee supply chain projects for Fair Trade USA from 2009-2014.
UM: That is such an amazing background. I’m so happy to get the chance to talk with you! As you know, the coffee industry is facing huge challenges today around the price for green coffee, and you’ve mentioned that cocoa is tackling similar problems. What are some major issues faced by cocoa farmers today?
LAS: There are many. Three big challenges for cocoa farmers are low prices, erratic prices, and extreme weather and changing weather patterns.
UM: Yes these are big ones!!
LAS: So big!
UM: There may not be much that TCHO can do to address weather patterns, but I know you have worked really hard on solutions to low and erratic cocoa prices. Can you tell me about TCHO’s approach?
LAS: Historically and currently TCHO has done direct price setting with our suppliers. We use price floors (The Fair Trade floor or a higher “TCHO Floor”) to control the low side of volatility risk. We use price premiums over market pricing for all cocoa we buy. For most of the cocoa we buy, we pay three premiums: one for Fair Trade certification, one for Organic certification, and one for the previously agreed to flavor/quality of the cocoa beans.
Higher prices in exchange for flavor specific and consistent cocoa is a mechanism that has worked well for TCHO and our small number of suppliers. While the cocoa volumes we purchase are very small in comparison to most chocolate companies, we see part of our role as “proof of concept”. It’s possible to pay more for cocoa and have a successful craft chocolate business.
UM: I really admire TCHO’s pioneering role with this model. As you mentioned before, most of the Chocolate that’s bought and sold isn’t even tasted first – so you are way ahead of the curve here.
LAS: Yes- 99% of cocoa is traded like a true commodity!
UM: That’s very wild! One thing you’ve shared with me is that this model is specifically intended for craft, specialty chocolate. And that’s only 1-2% of the market! You’ve also shared that TCHO’s model – being designed for a very specific market – doesn’t work or isn’t of interest for the majority of cocoa buyers and growers. It makes sense and I think we see something similar with models in coffee that incentivize for quality. But I’d love to hear your perspective on it! Can you tell me more about that?
LAS: All TCHO Source projects are open source- meaning anyone can access the equipment list for a flavor lab, the sensory standards are available to all, and anyone can purchase the cocoa from coops and farms who have invested in the ability to produce cocoa with a specific and consistent flavor.
The groups we’ve worked with in Latin America have attracted some additional buyers who are interested in this cocoa and willing to pay a premium- but for most of the groups we’ve partnered with- the majority of their cocoa is still sold without a flavor/quality premium.
The groups we’ve worked with in Ghana have garnered less demand from buyers (beyond TCHO) interested in improved quality cocoa and willing to pay a higher price. The feedback has been- most cocoa buyers are content with the existing quality and depend on the (low) price to meet their margins and keep the price of their chocolate/cocoa products competitive.
In short, improving quality cannot be the sole answer/advice to the vast majority of cocoa farmers seeking a sustainable price in a volatile commodity market influenced by global supply, global demand, speculation, exchange rates and more.
UM: That completely makes sense. How have some cocoa-producing countries stepped up to address these price issues?
Stay tuned for Laura Ann’s response, coming soon in the next blog post!
The second installment in this sere is here.
The third installment is here.